The Jewish Agency for Israel is in the throes of a struggle for its survival.

It is seeking to reform itself in order to retain a meaningful role in Israel and remain attractive to donors in the Diaspora who increasingly are bypassing its campaign in favor of other channels of philanthropy to Israel.

Many of the 400 delegates to the agency’s annual assembly last week left Jerusalem saying that they were frustrated that little of substance was achieved at a time when the agency is experiencing both fiscal and identity crises.

In an effort to ease a crushing cash-flow crisis, the United Jewish Appeal and the federations agreed to an emergency transfer of about $20 million.

The agency, the primary recipient in Israel of funds from this joint campaign, faces a cumulative debt of $76 million.

Many delegates complained that the agency’s governance remains bogged down by the political and ideological differences between the assembly partners from Israel and the Diaspora.

The historical governance structure of the Jewish Agency and its partner, the World Zionist Organization, has drawn fire for its irrelevancy and waste.

That, combined with dwindling campaign dollars and a changing relationship between Israel and the Diaspora, has prompted long-range plans by Chairman Avraham Burg and others for the agency’s radical downsizing, reorganization and redefinition of its mission.

In addition to the broad issues addressed by the assembly delegates, the agency:

passed a resolution concerning religious freedom in Israel

tabled a resolution on the Joint Authority for Jewish Zionist Education

appointed a new director general.

When pressed to defend and explain the agency’s purpose, delegates invariably point to the success of the continuing aliyah from the former Soviet Union.

The agency has overseen the immigration of about 65,000 annually and nearly 700,000 during the past six years.

But many, including Burg, who sought but failed to win approval of the establishment of a strategic planning unit, are looking ahead to other roles that the agency can play as a unique instrument of world Jewry.

“While focusing on this sacred mission” of aliyah, Burg said in an interview, “we have to prepare the ground for the post-rescue era.”

Although many welcome the reform plans as long overdue, for now, “the agency is in a tailspin,” as one North American delegate put it.

Indeed, a sense of flux and uncertainty seemed pervasive.

Marlene Post, national president of Hadassah, which is represented in the WZO, told one forum, “The Jewish Agency has had a long and glorious history,” but “it is faced with critical decisions about where it is headed.”

In the Diaspora, she said, “it is not particularly relevant.”

The grass roots “doesn’t understand it and it doesn’t make a difference in their lives.”

In spite of its troubles, it was clear that many Diaspora delegates do celebrate the agency’s role in rescue and resettlement and want to maintain it as vehicle for Jewish peoplehood, education and Israel-Diaspora partnership.

For many of the North American delegates, the highlight of the assembly and the best showcase for the agency’s expression of a Jewish voice was a resolution unanimously adopted in support of Jewish unity and calling on the Israeli government to preserve Jewish religious freedom as it now exists in Israel.

The highly charged resolution was fashioned in direct response to agreements made between the new Likud government and the Orthodox parties in the Knesset, which aim to reverse legal gains recently made by the Reform and Conservative movements through Israel’s Supreme Court.

The assembly adopted the resolution after vigorous debate and after approving a series of compromises.

Although the word “pluralism” was deleted from the original draft of the resolution in deference to the modern Orthodox members of the assembly, its passage nonetheless was construed as a victory by supporters of non-Orthodox streams of Judaism.

Originally proposed by the UJA, the United Israel Appeal and the Council of Jewish Federations, the final resolution called on the government not to enact or amend legislation that would change the “current situation” related to religious matters.

“This is a historic moment,” Shoshana Cardin, UIA chair, said before the vote.

Afterward, she said, “We came together to preserve the unity of klal Yisrael. I don’t recall such a show of unanimity.”

The assembly also approved a resolution proposed by Burg to form a commission of representatives from the Orthodox, Reform and Conservative movements for ongoing consultations with the government on religious matters.

But the spirit of compromise, many here said, also was driven by an implicit understanding that not endorsing religious pluralism would threaten the fund- raising campaign and the agency by alienating non-Orthodox donors.

Philip Meltzer, president of the Association of Reform Zionists of America, who was instrumental in crafting the compromise, wants to see follow-up by the fund-raising establishment and the agency commission.

“We expect all these organizations will join us in protesting any `changes in the current situation,’ and we will hold them to it publicly,” Meltzer said.

“In no way would we want to stop money going to the federations from Reform Jews.”

But, he added, Reform Jews will “have to be more actively supporting progressive institutions in Israel, and we’re going to urge them to do so.”

Since the mid-1980s, the Jewish Agency has been funding the Israeli institutions of the three major streams of Judaism, currently funneling roughly $1 million to each.

Meanwhile, the agency’s economic situation remains dire. The agency has undertaken a plan to cut $500 million over five years to cover deficits caused in part by flagging fund-raising campaigns by the UJA and federations, which funnel about $220 million annually to the agency through the United Israel Appeal.

Richard Wexler, the new president of the UJA, told the assembly that the UJA is poised to “reform, re-energize and reawaken” the campaigns.

Next year’s budget, proposed at $387 million and slated to be finalized in October, is down from this year’s $450 million budget.

The sharp decline is a result of the transfer to the government of the agency’s Youth Aliyah program, a network of villages for needy and immigrant youth.

Roughly half of the total budget is allocated toward immigration, mostly from the former Soviet Union, and initial immigrant absorption.

Another large portion, about $44 million, goes to the Joint Authority for Jewish Zionist Education, whose status as an independent self-governing body remains a source of frustration to many of the Diaspora fund-raisers. They question the effectiveness of some of its work in the United States.

Officials of the Joint Authority, however, ardently defend their work, whose hallmark has been promoting Jewish and Zionist identity, with a strong emphasis on Israel Experience programs.

A resolution requiring more accountability of the Joint Authority was tabled because opponents charged that the resolution violated its bylaws.

But the initiative clearly reflected the unhappiness by some of the fund- raisers with the system and “the cultural differences between the two bodies,” one source said, referring to the Jewish Agency and the WZO, which share governance of the Joint Authority.

Meanwhile, the agency is working toward a reorganization into three authorities dealing with immigration, Jewish education and the development of Israel in cooperation with the Diaspora, exemplified by the program Partnership 2000. That program pairs U.S. cities with Israeli regions for joint projects.

In Burg’s vision, the WZO would be combined with the agency, which he would like to see called “Bayit,” the Hebrew word for home and an acronym for “Israel-Diaspora covenant.” It would integrate the Zionist content of the WZO’s activities into the Jewish Agency’s work and eliminate the duplication created by the two separate bureaucracies.

The two entities have begun restructuring negotiations, with the aim of concluding by next June. But the timetable and the results are uncertain.

So far, the WZO, which will celebrate the 100th anniversary of the Zionist movement next year, has opted to remain independent but dramatically streamline its operations and focus primarily on Zionist youth activity and encouragement of aliyah.

The WZO’s $30 million budget is funded by the agency. Under the terms of current proposals being negotiated, the agency would continue funding it, albeit at lower levels, for a period of three years, after which the WZO has reserved the right to raise funds independently if it does not wish to join the agency.

On a separate but also politically sensitive matter, there was little public talk at the assembly about the agency’s ongoing bureaucratic tangles in Russia that are expected to be resolved in the coming weeks.

Russian authorities suspended the agency’s operating license earlier this year and curtailed its activities in several Russian cities.

The agency is working to submit a new application for accreditation.

In other business, the Board of Governors approved the appointment of Shimshon Shoshani as the new director general of the agency. He now serves as director general of the Education Ministry.